In this section we list the rules for investing success.
Don’t lose money.
This rule is non negotiable. The entire point of investing is get ahead and increase wealth. Say you have accumulated a lot wealth but you lost it all with a few key mistakes. All that work would have gone to waste and you lost precious time also leaving you less time remaining to achieve your financial goals.
Diversify to reduce risk.
It’s ok to miss out of the high flyer to reduce risk. Picking one winner hard and pouring all your assets on one is high risk. The odds of you having picked a winner is not good if all you have is one shot. Think of it as shooting one 3 pointer or lose it all and compare to six lay ups, shooting 5 two pointers and 5 three pointers. It not hard to imagine that you would more likely to have made a basket with the latter.